New RI Sales Tax on Short Term Rentals

RI Rental Tax Law Change

The new tax law expected to go into effect on July 1, 2015 will impact landlords who rent on a less than one year basis. If you rent on a yearly basis or month to month for an extended time the new law will not affect you.  landlords who rent seasonally(vacation rentals) and/or on a short term basis(student rentals) are affected.

How will it work?

A tax of 8% will be imposed on all short term rentals of one month or less.  Seven percent of the tax is collected and remitted to the state of Rhode Island by the landlord or their rental agent.  One percent of the tax will be remitted to the local town or city where the property is located.

In order to collect and remit the sales tax, the landlord must obtain a permit to make sales at retail.  He or she must submit the proper forms(BAR) along with a check to the RI Division of Taxation to obtain this permit.  This is the first step necessary to register as a landlord with the State of Rhode Island.